China extends silicon tariffs despite trade deal

MOSES LAKE — Despite agreeing last week to buy U.S.-made polysilicon as part of a new trade agreement inked last week, the Chinese government has renewed its tariffs on the product for another five years.

“We do not expect this announcement from (the Chinese government) to affect or change China’s commitment to purchase solar grade polysilicon from the United States under the terms of the Phase 1 Trade Agreement,” said a press release from Norway-based REC Silicon.

REC, which produced polysilicon for solar panels at its Moses Lake facility until it was shut down in mid-2019, said it also “looks forward to working closely” with the U.S. Trade Representative’s office as the Chinese commitment to buy more U.S.-made polysilicon is worked out.

“No decision about the re-start of the Moses Lake facility has been made at this stage,” REC said.

REC’s Moses Lake plant uses a patented process to continually produce polysilicon the company says is much cheaper than the batch process currently used by most polysilicon makers.

The dispute between China and the United States predates the Trump administration’s trade negotiations with China. More than 90 percent of the world’s power modules for solar panels are produced in China, which slapped a 57 percent tariff on U.S.-made polysilicon in 2013 after the U.S. imposed a 30 percent duty on Chinese-made solar panels.

This effectively blocked U.S. polysilicon makers like REC from the Chinese market. The company managed for a few years to make a go selling to customers in Taiwan and South Korea but was forced over the few years to reduce production and lay off employees.

REC also produces silicon gas for the electronics industry at a facility in Butte, Montana. Electronics-grade polysilicon has not been affected by the trade dispute with China. However, REC announced last fall that it is considering selling its Butte plant and using the proceeds to pay down debt and shore up its investment in Moses Lake.

The company is also looking at possible alternative uses for Moses Lake polysilicon. Current research suggests polysilicon anodes — the positive end — would significantly improve the performance of rechargeable batteries, though significant work remains to make the technology practical and affordable.

Charles H. Featherstone can be reached at cfeatherstone@columbiabasinherald.com.